COMMERCIAL STRATEGIC ENERGY MANAGEMENT PROGRAMS

Transcription

1 COMMERCIAL STRATEGIC ENERGY MANAGEMENT PROGRAMS BEST PRACTICES AND APPROACHES OCTOBER 22, 2016 JAY LUBOFF ASSOCIATE DIRECTOR REBECCA LEGETT MANAGING CONSULTANT VIJETA JANGRA MANAGING CONSULTANT 1 ROBERT FIRME SENIOR CONSULTANT

2 BEST PRACTICES IN SEM Purpose: To present findings from a national study on best practice strategies and design of commercial strategic energy management (SEM) programs for DTE Energy. WHAT IS SEM? INITIATION, OPERATION & IMPLEMENTATION, DESIGN SEM PROGRAM MODELS SEM PROGRAM ROADMAP SEM ELEMENTS 22

3 COMMERCIAL SEM PROGRAMS AND BEST PRACTICES SEM IS A HANDSHAKE TO SAVE ENERGY OVER A LONG-TERM CYCLE BETWEEN A PROGRAM ADMINISTRATOR AND A BUSINESS or ORGANIZATION S OWNER/ OPERATOR We ll focus on O&M and any capital improvements we can identify! Process/O&M improvement project Turning equipment off when not needed Fixing compressed air leaks Compressed air system optimization Production scheduling optimization Formalizing equipment shutdown procedures Improving process yield and associated Capital Improvements 3 3

4 STUDY APPROACH Navigant focused on SEM best practices of successful commercial SEM programs nationwide. PRELIMINARY RESEARCH Choose interview candidates (based on inclusion of SEM elements, timelines, focus on commercial sector) Gather initial information about programs 8 PROGRAM INTERVIEWS Include range of regions, customer types, and engagement models Discuss SEM program experience DEVELOP PROGRAM DESIGN/LOGIC MODEL Identify best practices and successful strategies 44

5 CUSTOMER PROFILE Customer Type Conv. Center SEM Program Interviews X Government X Grocery X Hospitals X X X X X X Labs X Offices X X X Restaurant X Retail X X Schools X X X University X X Source: Navigant 55

6 THREE SEM PROGRAM MODELS Cohort SEM multi-customers attend group workshops, or cohorts, over a 4-18 month period; customers share insights and results Flagship Build SEM Program starting with one site and expand to others after that Top- Down Recruit customer executives who then mandate SEM initiatives across their constituent sites 6 6

7 THREE SEM PROGRAM MODELS Market research informs the choice of program model. Cohort Flagship Top-Down Ideal for a market made up of many, equally strong customers or similar noncompetitors Ideal for a market with fewer customers but whose customers have multiple facilities Ideal for a market with few customers who are highly centralized Mid-sized Commercial Real Estate/Offices Schools Colleges/Universities Hotels Grocery chains Convenience Stores Large-Sized Real Estate Companies/Offices Hospitals Tech Companies Government Buildings 77

8 BEST PRACTICE SEM ELEMENTS 1. PEOPLE ENGAGEMENT 2. CUSTOMER SEM POLICY AND GOAL SETTING 3. FINANCIAL INCENTIVES 4. PROJECT PLANNING AND IMPLEMENTATION 5. MEASUREMENT AND VERIFICATION 6. MARKETING AND CASE REPORTS 8 8

9 BEST PRACTICES IN PEOPLE ENGAGEMENT, CUSTOMER POLICY, AND GOALS AND FINANCIAL INCENTIVES People Engagement A handshake with Organization Management, Champions, Internal Energy Teams is critical Maintain ongoing contact and encourage energy teams to include employees at all levels Energy Policy and Goals Set Energy Goals as Targets for Executive Oversight and Energy Team Focus = more $ savings Support Goals and Policies development for later Program Administrator Progress Tracking Financial Incentives (Three Types) Energy Savings Incentives at ± $ 0.02/kwh and $0.20/therm Measure-Based Incentives use DEEM incentives for specifically defined SEM projects Lump-Sum Incentives provides large monetary amount to meet SEM/ISO50001 standards 99

10 BEST PRACTICES IN PEOPLE ENGAGEMENT, CUSTOMER POLICY, AND GOALS AND FINANCIAL INCENTIVES Project Planning and Implementation Establish a system for customers to identify and implement savings opportunities System planning needs to be ongoing not just focused on low-hanging fruit Measurement and Verification Establish long-term data collection to determine savings persistence Estimate savings based on at least 12 months of savings to capture seasonal effects Account for changes in economics, etc. Marketing and Case Reports Publish case studies to use to advertise the value of SEM for recruitment Use past contacts and direct approaches, which are also used effectively by some programs 10 10

11 SEM PROGRAM ROADMAP Ideation and Initiation Operations and Implementation Market Transition 11 11

12 BEST PRACTICE INSIGHTS: INITIATION AND RECRUITMENT SEM Initiation RELATIONSHIP BUILDING Leverage existing networks or establish new ones If lacking in-house resources/experts, recruit experienced Third-Party Implementer MARKET RECONNAISSANCE Research the market, identify customer needs Understand customer s organizational structure (e.g., command-and-control vs. collaborative) Recruitment ACCESSING CUSTOMERS Utilize Account Managers Leverage Channel Partners or Professional Associations Engage Customer Executives (If Top-Down SEM model) SELECTING CUSTOMERS Identify the low-hanging fruit Be Selective Customer Eligibility Criteria Are Flexible 12 12

13 BEST PRACTICE INSIGHTS: OPERATIONS AND IMPLEMENTATION Think organizationally; work with all parts of the customer s shop Keep focused on continuous improvement opportunities and new needs Provide interactive support with other customers (cohort) Contract out (if needed) or learn and then run program Be dynamic: evolve around customer needs 13 13

14 BEST PRACTICE SEM PROGRAM DESIGN Identify Internal and Market Barriers Internal Lack of SEM policies and goals Lack of resources for SEM planning and implementation Challenges conducting EM&V Limited qualified contractors with SEM knowledge and expertise Market Lack of Awareness of benefits High upfront project costs Lack of customer motivation Uncertainty of savings realization Strategies Select Strategies to Overcome Barriers 1. Marketing and case reports 2. People engagement 3. Customer SEM Policy and goal setting 4. Financial incentives 5. Project planning and implementation 6. Measurement and verification Activities Choose Activities to Implement Strategies Publish SEM articles and case studies Target high-potential committed customers Utilize account managers and trades association to recruit SEM Establish energy teams and internal champions and meet regularly Organize or sponsor trainings Support customers developing policies and goals and savings opportunities Provide energy based or performance based incentives Use standard M&V protocols, provide tools and software as needed 14 14

15 BEST PRACTICES PROGRAM DESIGN: THEORY OF CHANGE/LOGIC MODEL 15 15

16 OPERATION LIFECYCLE OF SEM PROGRAMS Pre-Existing Program Initial Customer Recruitment Market Reconnaissance Program Ideation and Initiation Early-Market Maturity Phase Mid-Market Maturity Phase Mature Market Maturity Phase Market Transition Potential Third-Party Implementer/Contractor Enters Potential Third-Party Implementer/Contractor Exits Years from Conception

17 QUESTIONS? 17

18 CONTACTS JAY LUBOFF Associate Director REBECCA LEGETT Managing Consultant VIJETA JANGRA Managing Consultant ROBERT FIRME Senior Consultant